The bow-tie pattern is a swing-trade setup that uses multiple moving averages to capture a price thrust in the direction of a trend. The article "Trading the bow-tie pattern" by Dave Landry (Active Trader, November 2000) described the strategy, which used a combination of three moving averages: a 10-period simple moving average (SMA), and 20- and 30-period exponential moving averages (EMA).

This version of the strategy includes a filter that requires the shortest and longest moving averages to be within a certain distance of each other when an entry is triggered. Also, this system it is designed to hold positions longer than the original pattern setup.